Gold Positional Update
Impulse: (IM)
An
Impulse is a five-wave pattern labeled 1-2-3-4-5 moving in the direction of the
larger trend.
1)
Wave 1 must itself be an Impulse or a Leading Diagonal pattern.
2)
Wave 2 can be any corrective pattern except a Triangle.
3)
No part of wave 2 can retrace more than 100% of wave 1.
4)
Wave 3 must be an Impulse.
5)
Wave 3 must be longer than wave 2 by price.
6)
Wave 4 can be any corrective pattern.
7)
Waves 2 and 4 cannot overlap.
8)
Wave 5 must be an Impulse or an Ending Diagonal.
9)
Wave 5 must be >= 70% of wave 4 by price.
10)
Wave 3 must never be the shortest by price when compared to waves 1 and 5.
Principle of
Elliot wave explained
Basic
Sequence
There are two types of waves: impulse and corrective.
Impulse waves move in the direction of the larger degree wave. When the larger
degree wave is up, advancing waves are impulsive and declining waves are
corrective. When the larger degree wave is down, impulse waves are down and
corrective waves are up. Impulse waves, also called motive waves, move with the
bigger trend or larger degree wave. Corrective waves move against the larger
degree wave.
Three
Guidelines
There are numerous guidelines, but this article will focus
on three key guidelines. In contrast to rules, guidelines should hold true most
of the time, not necessarily all of the time.
Guideline 1: When Wave 3 is the longest impulse wave, Wave 5 will
approximately equal Wave 1.
Guideline 2: The forms for Wave 2 and Wave 4 will alternate. If Wave
2 is a sharp correction, Wave 4 will be a flat correction. If Wave 2 is flat,
Wave 4 will be sharp.
Guideline 3: After a 5-wave impulse advance, corrections (abc)
usually end in the area of prior Wave 4 low.
Oil Positional Report Update
A price channel is a continuation
pattern that slopes up or down and is bound by an upper and lower trend line.
The upper trend line marks resistance and the lower trend line marks support. Price channels with negative slopes (down) are
considered bearish and those with positive slopes (up) bullish. For explanatory
purposes, a "bullish price channel" will
refer to a channel with positive slope and a "bearish
price channel" to a channel with negative slope.
1.
Main Trend
Line: It takes at least two points to draw the main trend line.
This line sets the tone for the trend and the slope. For a bullish price
channel, the main trend line extends up and at least two reaction lows are
required to draw it. For a bearish price channel, the main trend line extends
down and at least two reaction highs are required to draw it.
2.
Channel Line: The line drawn parallel to the main trend line is called
the channel line. Ideally, the channel line will be based off of two reaction highs or lows. However, after the main trend line has been established,
some analysts draw the parallel channel line using only one reaction high or
low. The channel line marks support in a bearish price channel and resistance
in a bullish price channel.
3.
Bullish Price
Channel: As
long as prices advance and trade within the channel, the trend is considered
bullish. The first warning of a trend change occurs when prices fall short of
channel line resistance. A subsequent break below main trend line support would
provide further indication of a trend change. A break above channel line
resistance would be bullish and indicate an acceleration of the advance.
4.
Bearish Price
Channel: As
long as prices decline and trade within the channel, the trend is considered
bearish. The first warning of a trend change occurs when prices fail to reach
channel line support. A subsequent break above main trend line resistance would
provide further indication of a trend change. A break below channel line
support would be bearish and indicate an acceleration of the decline.
Silver Update
Silver from the above weekly chart is taking support at
18$ mark, previously it has tested the same level in June 2013 and recently
also market is failing to sustain below the support of 18$ level. Silver has
corrected from the level of 49.78$ from 2011 March and have shown the formation
of Elliot wave. There was a short consolidation in wave (ii) with the formation
of Bar Flag Pattern, where the range of the Flag was between 35$ resistance and
support of 26$ was seen. The range trading what was seen between 35 – 26 comes
to 9 points and breakdown below 26$ target comes to 17$ level. On the other
side silver is taking support at 18$ which is 76.4% retracement of wave I which
rallied from 8.5$ to 49.78$ mark. Recent
bottom of 18$ can be taken at completion of wave II which is 76.4% retracement and
also the completion of internal five wave, where reversal is expected from the
support level of 18$. Calculation of the internal wave is show in chart itself
and in expected to give a-b-c pattern upside move. Calculation 100% of wave I
wave (a) might test the level of 35.67 before entering in the corrective wave
(b) formation.
Looking
at long term chart wave I which started from 8.5$ to 49.78$ and there after
correcting to the level of 18.2$ was retracement of 76.4% retracement of wave I
and is now expected to enter in wave III where it is expected to move and test
the level of 68.15$ which is 121% of wave I. In this uptrend there will again
be the minor moves in where short term profit booking might be seen at previous
support and resistance level.
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